Macbeth is using a metaphor.

A metaphor is a literary device in which something is compared with something else.  The language is not literal.

In this excerpt, Macbeth is concerned about Banquo and the murderers he sent after him.  He was worried that Banquo knew that he became king by murdering Duncan.  He is going to have a big banquet at the castle.  Again, Banquo is on his mind. 

When he says we “Must lave our honors in these flattering streams” he is saying that they have to pretend that everything is okay, and remember that “lave” means basically “wash.”  He is saying they need to wash their reputations in flattering of Banquo so that no one suspects anything.  They will mask their emotions with "vizards" to disguise what they truly are for the guests.  (That's a metaphor too.)

Of course, remember that Lady Macbeth is an innocent accomplice in all of this.  While she did encourage Macbeth to kill Duncan, she had no idea that he was going to kill Banquo and Fleance.  She thinks that he is going off the rails, and she is trying to keep him steady.

Come on;

Gentle my lord, sleek o'er your rugged looks;

Be bright and jovial among your guests tonight. (Act 3, Scene 2)

Basically, this is a wife warning her husband that there are going to be a lot of people in the house and he had better act like nothing is wrong and everything is normal so they don’t get suspicious that he is a murderer!  There were plenty of witnesses the first time, and Macbeth is hardly on solid ground.  He should not do anything to attract attention.  He needs to act like a king, and win the people's trust.

Macbeth does not take her advice.  During the dinner, he sees Banquo’s ghost and gets more and more disturbed.  He is doing his best to talk up Banquo and explain his absence as planned, and then he goofs when he refuses to sit at the table because Banquo’s ghost is there!

MACBETH

Here had we now our country's honour roof'd,

Were the graced person of our Banquo present;

Who may I rather challenge for unkindness

Than pity for mischance!

ROSS

His absence, sir,

Lays blame upon his promise. Please't your highness

To grace us with your royal company.

MACBETH

The table's full. (Act 3, Scene 4)

Ouch!  Lady Macbeth tries to explain it away, saying Macbeth is like this all the time.  I am sure he is just tired.  It is really nothing. She is able to smooth things over, but Macbeth almost blows it.

This Act shows things being to unravel for Macbeth.  The murder of Banquo is the beginning of the end, and his seeing Banquo's ghost shows how it affects him.  From here on, he will be more and more affected by the prophecies and supernatural influences, and they lead to his destruction eventually.  Lady Macbeth tries to prevent it, but she will succumb to her own guilt first.